Pumped-storage hydroelectricity (PSH), or pumped hydroelectric energy storage (PHES), is a type of hydroelectric energy storage used by electric power systems for load balancing. A PSH system stores energy in the form of gravitational potential energy of water, pumped from a lower elevation reservoir to a higher elevation. Low-cost surplus off-peak electric power is typically used to run the pumps. During periods of high electrical demand, the stored water is released through turbines to produce electric power.

Pumped-storage hydroelectricity allows energy from intermittent sources (such as solar, wind, and other renewables) or excess electricity from continuous base-load sources (such as coal or nuclear) to be saved for periods of higher demand. The reservoirs used with pumped storage can be quite small, when contrasted with the lakes of conventional hydroelectric plants of similar power capacity, and generating periods are often less than half a day.

The round-trip efficiency of PSH varies between 70% and 80%. Although the losses of the pumping process make the plant a net consumer of energy overall, the system increases revenue by selling more electricity during periods of peak demand, when electricity prices are highest. If the upper lake collects significant rainfall, or is fed by a river, then the plant may be a net energy producer in the manner of a traditional hydroelectric plant.

Pumped storage is by far the largest-capacity form of grid energy storage available, and, as of 2020^[update], accounted for around 95% of all active storage installations worldwide, with a total installed throughput capacity of over 181 GW and as of 2020 a total installed storage capacity of over 1.6 TWh.

As of 2025, according to International Hydropower Association, worldwide PSH provides 200 GW power and 9000 GWh energy storage, while the Battery energy storage system market is catching up very fast in terms of power generation capacity. As of May 2025, China’s cumulative BESS installations are reported at 106.9 GW and 240.3 GWh.

A pumped-storage hydroelectricity generally consists of two water reservoirs at different heights, connected with each other. At times of low electrical demand, excess generation capacity is used to pump water into the upper reservoir. When there is higher demand, water is released back into the lower reservoir through a turbine, generating electricity. Pumped storage plants usually use reversible turbine/generator assemblies, which can act both as a pump and as a turbine generator (usually Francis turbine designs). Variable speed operation further optimizes the round trip efficiency in pumped hydro storage plants. In micro-PSH applications, a group of pumps and Pump As Turbine (PAT) could be implemented respectively for pumping and generating phases. The same pump could be used in both modes by changing rotational direction and speed: the operation point in pumping usually differs from the operation point in PAT mode.

In closed-loop systems, pure pumped-storage plants store water in an upper reservoir with no natural inflows, while pump-back plants utilize a combination of pumped storage and conventional hydroelectric plants with an upper reservoir that is replenished in part by natural inflows from a stream or river. Plants that do not use pumped storage are referred to as conventional hydroelectric plants; conventional hydroelectric plants that have significant storage capacity may be able to play a similar role in the electrical grid as pumped storage if appropriately equipped.

Taking into account conversion losses and evaporation losses from the exposed water surface, energy recovery of 70–80% or more can be achieved. This technique is currently the most cost-effective means of storing large amounts of electrical energy, but capital costs and the necessity of appropriate geography are critical decision factors in selecting pumped-storage plant sites.